Egalet Layoffs to Wipe Out Almost 40% of Company’s Workforce

Cost Control Frazao

Pharmaceutical Company Seeking Cost Reductions

Specialty pharmaceutical company Egalet Corp has announced that the company is slashing almost 40% of its workforce as part of a cost reduction plan. The company has confirmed, however, that the layoffs won’t be in its sales department.

Prior to the layoffs, Egalet employed a workforce of about 150, including roughly 87 employees in the sales and marketing department.

The Wayne, Pennsylvania-based company announced the cost-cutting plan along with its second-quarter earnings results. The layoffs follow a significant hike in net losses experienced by the company in the latest quarter.

Part of these losses are attributable to the significant jump in Egalet’s general and administrative expenses in the second quarter of 2017. The company incurred $12.5 million in administrative costs in the quarter, which is more than a 40% jump from the $8.9 million incurred in the same period a year ago.


The increase in administrative costs was mostly due to post-marketing costs after the Food and Drug Administration (FDA) approved the company’s drug ARYMO ER.

Overall, the company reported a net loss of $26.5 million, which jumped by more than 11% from $23.8 million in the same quarter in 2016. This is despite the fact that the company’s net sales saw a staggering 80% increase, from $3.5 million to  $6.3 million.

Egalet President and CEO Bob Radie said in the company’s earnings call that most of the cost-cutting will take place in the research and clinical development departments, while sales and marketing departments will not be hurt. Radie said that the cuts became necessary for the company to maximize its net revenue.

Egalet expects to generate cost savings of between $55.0 million and $60.0 million in fiscal-year 2018, due to the job cuts and related savings. Overall, the company expects to see a 35% reduction in costs by the same period next year.


Egalet Announces Second Quarter 2017 Financial Results and Expense Reduction Plan,” Egalet, August 9, 2017.

Egalet trims non-sales workforce by 40%,” Philadelphia Business Journal, August 9, 2017.